Aer Lingus said today it had agreed with Airbus to cap its long-haul fleet at eight aircraft until 2013, significantly reducing its capital commitments for the next three years.
Aer Lingus, which appointed Christoph Mueller as its new chief executive last month, will take one new aircraft as planned next year but adjusted the delivery of five more until between 2013 and 2015.
The loss-making carrier also announced that it would reduce its current long-haul fleet through the early termination of existing lease agreements on two aircrafts, adding the revised schedule was negotiated at no additional cost.
"This deferral plan is very welcome in the face of the strong competition on the routes and the drag on the group's net cash position from the capex plans," Goodbody Stockbrokers analyst Eamonn Hughes wrote in a note.
"Aer Lingus was struggling on its long-haul profitability so this move is likely to be helpful on the earnings front, though the most crucial factor will be the cash position."
Shares in the former state carrier were up 1 per cent at 47 cents earlier this morning
Reuters